Late-Stage Venture Firms
Learn to Play Hardball

By

Suzanne McGee Staff Reporter of The Wall Street Journal

Updated May 17, 2001 12:01 a.m. ET

Entrepreneurs, beware.

Not long ago, start-up technology companies had a lot of clout when negotiating with venture capitalists. They could play one VC fund against another to get the biggest cash infusion in return for giving up the smallest stake possible.

Nowadays, however, the phrase "down round" -- so named because the VC firm pays a bargain-basement price, getting more shares for less money than in the previous...